PRESS RELEASE

FACTS ABOUT BEML MIDWEST JOINT VENTURE ISSUE

In sequel to news telecast in ND TV on 18th April 2012, wherein BEML Limited (BEML) has been falsely projected as a wrong doer in the Joint Venture with Midwest Granite Pvt. Ltd., (MGPL) together with false statement of Shri Raghava Reddy, one of the Joint Venture partner of BEML Midwest Limited (BMW) and exhibited the legal opinion document of ALA attached to the CID, Hyderabad, the following facts are furnished in the best interest of truth :
• First and foremost, the exhibited legal opinion document is a premature and one sided and appears to be a tutored one, as the investigation on the complaint filed by BEML on 7.11.2008 vide FIR No.249/2008 with the Commissioner of Police is yet to be concluded by the CB-CID.
• Noticing inactions on the above Compliant, BEML has filed a Writ Petition No.9684/2011 before the Hon'ble High Court of Andhra Pradesh and directed the Authorities of Andhra Pradesh to complete the investigation within a period of three months. The investigation Agency was changed from Central Crime Station to CB-CID. During this period Shri K Raghava Reddy obtained anticipatory bail. The Investigation is yet to be concluded by the CB-CID.
• When the investigation is not complete, it is very surprising how the Investigating Officer could place all the facts before the ALA seeking her opinion. It is evident that the ALA has not been provided with all the facts of the case. By the opinion furnished by ALA dated 07.09.2010, appears to be based on the papers furnished by Midwest Granite Pvt. Ltd.
Besides, the other misdeeds committed by the Nominee Directors of MGPL are:
• Fabrication of JV Board Resolution dated 16.1.2008 and filed with Bank.
• Made the payments for purchase of Iron Ore without proper documents
/contracts.
• Transferred Rs.11 Crores to M/s. Reliance Granite Pvt. Ltd.,(RGPL) on
01.04.2008 without authority and approval. This transaction is an interested party transaction, as RGPL is a sister concern company of MGPL, where the nominee Directors of JV Company are also Directors in RGPL.
…2.
: 2 :
• Though Shri. Raghava Reddy has agreed to repay the money, he backed out later.
• The MOIL contract was granted to BEML on nomination basis, which was first given to MGPL and on formation of JV, the same was transferred to JV by the Board of JV and not by CMD of BEML, as opined by ALA.
• On finding misappropriation of funds by Shri. Raghava Reddy of and on refusing to make good the money transferred during the Board Meeting of JV on 02nd Sept 2008, BEML was forced to take legal course of action and filed Company petition No.55/2008 in September 2008 before the Company Law Board, Chennai for oppression and mismanagement of JV by Shri. Raghava Reddy, the proceedings concluded to-day i.e.,
19.04.2012 and Orders are reserved.
• BEML has also filed a Criminal case on Shri Raghava Reddy before XIV Addl. Chief Metropolitan Migistrate at Hyderabad vide SR No. 4912/2009 for the forgery of Board Resolution and obtaining loan and operating the loan account in State Bank of Hyderabad and diverting the funds to his sister concerned company for personal gains.
• The Company petition 55/2008 was filed by BEML and few days before the interim orders pronounced by CLB, Shri. Raghava Reddy filed Company petition 2/2009 and not as opined by ALA. Even the Criminal case with Central Crime Station, Hyderabad was filed way back in November 2008 and not as opined by ALA.
• The entire facts and record available with the Investigating Authorities reveal Shri. Raghava Reddy and his associates in connivance with Senior Vice President of JV manipulated, fabricated the records and diverted the funds, putting the JVs operations to a grinding halt. It is the nominee Directors of MGPL mainly Shri. Raghava Reddy and the Senior Vice President and the associates are the persons who caused the wrongful loss to the JV and are liable for action under the Sec 403, 406, 408, 418 and 420 under Criminal Law r/w 120 IPC and not BEML CMD Shri. V RS Natarajan as opined by ALA CID, Hyderabad.
• The entire opinion rendered by ALA on 07.09.2010 appears to be not on the entire records presented by BEML to the Investigating Agency.
All the facts narrated do have necessary documentary proof.

Bangalore A release by BEML LIMITED

19th April 2012

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